Kunal Pansari (Accountant) (1037 Points)
23 February 2016Our Company has availed a transportation service from Greatway Carrying Corporation, for which they had issued us a invoice of Rs. 112130.00. Now we are supposed to make them a the payment after deducting the TDS on the abovesaid amount. But the main confusion is about the rate of TDS to be deducted. Someone told us that we should deducts TDS @ 2% but the transporter insists that TDS should be at 1%.
So what would be the actual rate of TDS?
anand
(Accountant)
(32 Points)
Replied 23 February 2016
Sir
You please ask your service provider that whether he is an individual or Hindu undivided family Than it is 1% otherwise it is 2%
Pleses note that
(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;
(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,
Kunal Pansari
(Accountant)
(1037 Points)
Replied 23 February 2016
Thank you for your response.
But the main issue is how do we verify whether it is an individual or non-individual.
The transporter will obviously call itself as an individual for low TDS rate.
Prateek
(Partner)
(143 Points)
Replied 23 February 2016
For deducting tds @ 1% or 2%, you need the pan of the transporter. Otherwise you have to deduct TDS @ 20%.
Look for the fourth letter of the PAN. Fourth letter of PAN is "I" for individual, "H" for HUF, "C" for company.
Deepak sharma
(Learner)
(1431 Points)
Replied 23 February 2016
Sorry Mr Prateek, I would like to correct you, Individual PAN contained fourth letter as "P"
Deepak Singh Bisht
(Accounts Executive)
(73 Points)
Replied 23 February 2016
YES AGREE WITH DEEPAK SHARMA.
Prateek
(Partner)
(143 Points)
Replied 23 February 2016
Thanks for correcting me sir.
Hoping that my answer will solve mr. Kunal's problem.
CA Jitendra Yadav
(Chartered Accountant)
(23 Points)
Replied 23 February 2016
CS Dhawni Chandan
(Assistant Company Secretary at MNC)
(9 Points)
Replied 23 February 2016
valji
(Accounts manager-MBA)
(2150 Points)
Replied 24 February 2016
sumit awasthi
(Accountant)
(21 Points)
Replied 27 February 2016
tds @ 1% in case of individual/HUF and 2% in others e.g firm,Company. If Pan is not provided by the Service Proveder then deduct 20% on basic amount.
CAclubindia
